China can’t ditch state-led drive for high technology

By Hu Weijia Source:Global Times Published: 2019/4/11 20:13:43

The US produces only 5 percent of the world's lithium-ion batteries, some statistics show, lagging far behind China. 

Now, US government officials plan to meet with automakers in early May as part of a "first-of-its-kind effort to launch a national electric vehicle supply chain strategy," Reuters reported.

While China's state-owned enterprises and state-led research projects have been criticized by some US observers for disrupting market competition and posing a threat to national security, the US government may enhance its role in the scientific field by announcing "first-of-its-kind" national strategies.

A new trend in the world economy is emerging, as national industrial strategies are mapped out across major countries, ranging from the US and Germany to Japan and South Korea. Many nations have attached importance to state-led research and development (R&D) plans to advance their competitiveness in the global cutting-edge technology race.

The Japanese government is reportedly studying a new R&D mechanism to promote disruptive innovations, with 100 billion yen ($900 million) worth of investment in five years. 

The EU has announced that it will mobilize 2.7 billion euros ($3.1 billion) in 2018-20 to support high-risk, high-gain innovation that will "create the markets of the future." 

Some observers think Western countries focus on state-led research projects because they feel threatened by the improvement of China's scientific and technological strength. But this view is unjust and misses the big picture of cutting-edge innovation in today's world. 

In the 20th century, companies or even individuals could bear the cost of cutting-edge innovation. As a result, many well-known high-technology companies emerged. But now, most cutting-edge innovation costs a fortune, and it's based on breakthrough in the field of basic science. 

Only a government is capable of mobilizing the money and human resources to drive such innovation. Global high-technology competition has become an inter-state race, with governments as the participants.

While China is trying to develop strength in advanced technologies that have until now been the domains of the US and European countries, they also view China as a major competitor. China should not reduce support for state-led projects under pressure from the West. 

In contrast, more effort is needed to push forward China's national industrial goals to further invest in state-led research projects, especially in strategic industries such as 5G networks, aerospace, advanced numerical control tools, and energy-efficient and new-energy vehicles.

The author is a report with the Global Times. bizopinion@globaltime.com.cn

Posted in: EYE ON ECONOMY

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